Are Living Trust Documents Recorded?
A living trust is a trust that takes place while you are still alive. It may be revocable or irrevocable, but is always irrevocable after you die. A trust is legally established when you draft a trust document with the appropriate content and deposit assets into the trust. Some states allow trust documents to be filed with the state government.
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Basic Structure
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A trust document must contain at least the name of the grantor, the name of the trust administrator, and at least one beneficiary. You should also name the trust --- "The John Doe Trust Fund" is an acceptable trust name if your name is John Doe, for example. Sign the trust document, and have the trustee sign an acknowledgment confirming that he accepts his appointment as trustee.
Trust Assets
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A trust can be funded with a wide variety of assets -- personal property such as automobiles, real estate, cash and even intangible assets such as corporate stock. Change the title of all titled trust assets, such as automobiles and real estate, into the name of the trust, and open a bank account in the name of the trust. List the initial assets of the trust in the trust document.
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The Trust Administrator
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The trust administrator, also known as the trustee, may be an individual or a business entity. Lawyers and banks often serve as trust administrators. If the trustee is to be paid out of trust assets, state this in the trust document. Outline the authority of the trust administrator --- whether he has the authority to invest trust assets, for example. Name an alternate trust administrator in case your first choice dies (in the case of an individual) or is dissolved (in the case of a business entity).
The Beneficiaries
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Beneficiaries may be individuals or business entities. Name alternate beneficiaries in the trust document, in case of death or dissolution of the primary beneficiaries. You may have the trust administrator distribute trust assets in lump sum, such as when you die, or over time, such as in the case of a spendthrift relative who you fear might squander a lump sum distribution.
Revocability
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An irrevocable trust is taxed as a separate entity, which may provide tax benefits by kicking you into a lower tax bracket or avoiding estate tax when you die. If you intend the trust to be irrevocable, state this clearly in the trust document, because otherwise state law might treat it as revocable.
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References
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